Understanding Your Customers
The amount of data that a manufacturing company can collect about its customer base is staggering. No longer limited to basic sales reporting, businesses can now track and monitor past purchases, spending patterns, changes in demand, the influence of marketing initiatives and more. And while collecting and housing all of that data is a good start, it’s difficult to gain any value from it unless you can effectively review, organize, and pull insights from the data to get a better understanding of the businesses you serve.
Business Intelligence (BI) software can help companies better understand, predict and influence the behavior of customers by providing clear insights into how existing customers think, act, and spend using that collection of Big Data. With a better understanding of customers’ needs, wants, and behavior you are then in a better position to serve them, to increase profit from existing customers, and to pull in more targeted new customers.
Here are three ways you can use business intelligence to better understand YOUR customers.
Understand Customer Behavior & Profitability
Business intelligence can offer numerous analytical capabilities for measuring customer profitability, as well as for ranking and scorecarding customers across a number of areas including net profitability, customer performance by month, and channel profitability. For instance, BI software can be used to rank existing customers based on the recentness, frequency and value of their purchases. This gives you the ability to better organize your customers into more targeted opportunity groups for up-selling and cross-selling. With business intelligence, companies ensure that their sales and marketing efforts are aimed at retaining and optimizing the right customers and attracting the right prospects with the right offers, be it an up-sell to an existing customer or an incentive to pull in new customers.
Predict Customer Demand
Business intelligence can help business planners improve forecast accuracy and the overall sales and operations planning process. For instance, BI software can track order and order line fill rates so the company is ready to handle seasonal spikes and drops in orders. A high-end food and beverage producer can use this data to stock their online (and in-store) shelves with the right items at times when demand is the highest. When a drop in demand is expected the producer knows to pull back on production and save inventory space for other products. Business intelligence software also allows you to set the outlier thresholds to eliminate past events that could affect future customer demand forecasts so the data is more accurate.
Influence Customer Behavior
BI software helps companies easily plan, monitor and assess the success of their promotional activities to see what marketing campaigns/promotions your customer base is reacting the best too. That way, marketing budgets can be shuffled and allocated to the more successful campaigns that produce the best possible ROI. For instance, that same high-end food and beverage producer might want track the effectiveness of a free shipping for the holidays offer versus the effectiveness of a 10% off coupon. Which offer was used more frequently? Which offer spurned customers to add more items to their online shopping cart? By comparing actual to expected results by campaign companies can “market” smarter and better identify opportunities to increase sales and growth.
With a business intelligence solution in place, a more intelligent enterprise can better address customer-focused business improvement opportunities. Effective use of customer analytics leads to improved customer retention rates, higher revenues from up-sell/cross-sell campaigns, and enhanced levels of customer satisfaction.